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New royalty rates on minerals in India likely by June end

The government is likely to come up with new royalty rates for major minerals including iron ore by month end which will boost its revenues significantly.

A top Mines Ministry official said that "An inter-ministerial panel, formed to review royalty rates has submitted its draft recommendations. Consultations with states are on and the government is hopeful of finalizing it by June and implementing the same by August.”

Once the new rates are implemented, the same would not only increase the revenues significantly but also address the concerns of the states, seeking larger share of royalty.

The royalty rates for major minerals, including iron ore, are due for a revision this year and the 17 member inter ministerial study group has submitted its draft report.

There are 51 minerals prescribed in the second schedule of the MMDR Act, 1957, and the rates vary from mineral to mineral. The royalty on iron ore is 10% at present. The last revision was done in 2009, after which the revenue collection increased from INR 2,319.21 crore in 2008-09 to INR 4,469.75 crore in 2009-10.